Morgan Stanley (MS) Earnings Call Transcript & Summary

Next up, we have Sigal Zarmi. Sigal is an amazing individual. She is a Managing Director at Morgan Stanley. Sigal, welcome to the program.

Hi, Hunter, good to be here. Thank you for inviting me.

Great to see you. Hey, Sigal, this is a little off script and you don't have to go there, but I would love to talk about professional context on leadership and career assent. And you've had such an amazing career. When you talk about highlights of your career and key decisions, what do you want to share with the audience? What kind of excites you most? And what's your mission or passion in the context of being a tech leader?

It is unscripted. I have a passion for technology and process improvement. I always had that. So I think for me, the big thing was always to be curious, to ask questions, to learn about not just what I need to do, but also the impact on the business and try to see how technology can improve the processes to make customer impact and really help the business do whatever we do for customers in a better way. And I think I got that passion early on when I was serving in the Israeli army. I'm originally from Israel. And I've come across so much bureaucracy, and -- of processes that could have been done much more streamlined that, that's where I decided to go into studying computer science because I felt that with technology, we can really improve processes and make people's lives more efficient and effective. And I'm happy to say that I still carry that passion with me 30 years later, and it's just been a wonderful journey to be able to do it for a few amazing organizations.

That's a great comment. We share that same passion. So that's really amazing. When you think of your role at Morgan Stanley, set a little context, what exactly are you doing?

So I'm Head of Transformation. And I see my role as removing barriers to ensure that my team and the rest of the organization are building the right connections, the right technologies, the right capabilities to strengthen us to be flexible and responsive. And COVID has shown us how important that is to be flexible and responsive and being able to adapt and perform for our clients in any business environment. And we've seen that in spades over the last few months, trying to serve customers who are working from home, trying to connect with our teams and lead through a Zoom screen like we're doing now. And that takes a lot of grit and resiliency and leadership on everybody's part, not just the managers in the organization, but really everybody has to step up. So my role is trying to progress the organization, how we're leveraging technology in the most effective way and how do we make sure that our businesses are leveraging technology in the most effective way.

It's a really trying time, really unprecedented, right, unchartered. How would you use this opportunity in time, this crisis, to drive innovation?

So I would say that at time like that, you're kind of forced to change, and you flex muscles that you haven't flexed before. And what we've seen is that a lot of the collaboration tools that we've had before have not been used as much when people were in the office and getting used to doing things face-to-face. So the -- that piece -- one piece of innovation for us would help our business and our employees is taking up to leveraging the tools that we already have and leveraging them in spades. So digitizing some of our manual processes that has done -- has been done really fast over the last few months. So for example, signatures on documents, right? If some -- if, in the past, you had to get a real signature, we had automated it in many areas of the business, but not everywhere. So now we've rolled it out everywhere, much faster. Leveraging of some of our collaboration tools. People don't have printers at home and making sure that things that -- everybody is learning to work from a desktop or a laptop and not having able to print a document at home has been a change in how people behave. So I think the crisis from an innovation standpoint clearly drove people's behavior. The other thing that I would say is that we have evaluated our strategic opportunities and really accelerated some of them. So we have accelerated our move to the public cloud and put more power and resources behind that. We think that the experiences we had during COVID have shown us that we can take advantage of the elasticity of the cloud and that was very favorable to us. So we're going to do more of that. And a few other things that we are accelerating and pushing innovation in that way.

So thank you for that. In this purely digital world, we live in now, a Zoom world or a Teams world, a video world, how are people leading differently? How are you leading differently? And how are you checking in with your organization? What did you learn?

Yes. We -- well, it's interesting because everybody has kind of moved to be the same size box, right? So you feel like everybody equal. But you still have -- every person has their own unique situation. And that's possibly the job is to understand the team's situation and what is happening behind the scene because people have the -- some of them have not been comfortable in putting boundaries between work and personal lives, some of them have constraints on what they need to do as far as taking care of children, the housework, elderly parents and what have you. So as a leader, our job is really to understand what our people are going through and encourage them to come forward and speak up and be very forthcoming and also calling out on people because in face-to-face meetings, it is easier for the loudest person in the room to speak up all the time. And as a leader, you need to draw out everybody to the table. Same thing happens on Zoom. You have to make sure that everybody is participating, feeling engaged. The last thing that I have to say that was a real, I would say, pleasant, not so much a surprise, but it came out is how the values of the organization are coming to play at a period of a crisis. And I think what we learned is that the importance and the impact of our corporate values and ethics has enabled us to really stand strong and unite, even while we are all apart working in different locations. And the values of Morgan Stanley have been so strong and of carrying us so authentically through this period that I think that's why we've been successful in increasing productivity, keeping people engaged and really making sure that we deliver for our customers.

Are those values in the public domain? Can you talk about any one of them?

Yes, yes, absolutely. We have 5 values, and the fifth one was just added recently. So our values are leading with exceptional ideas, so that is driving a lot of innovation; putting clients first; doing the right thing; and giving back; and the fifth one that we just added was committed to diversity and inclusion. And that value was embedded in doing the right thing, but it wasn't really called out specifically. And over the last 1.5 months, with all the events in the U.S., we have added that value because we feel really passionate about diversity and inclusion. And I'm really happy that our CEO, in addition to other actions that he has taken, had put that value so prominent between -- for all of the employees because the values of Morgan Stanley are really leading the organization. So that's a very important statement.

Sigal, thanks for that. When you think of diversity and having a diverse team that drives creativity in the whole go-to-market, what comes to mind in how you keep people inspired and focused and up in these trying times?

I think creativity is diversity. And diversity, in the broader sense, in order to be creative, you need the different type of experiences, different ideas, different backgrounds, different cultures, different race, ethnicity, all of that comes to play when you want to be creative. And I feel that organizations that have been successful in cultivating that differences of opinions have been much more successful. And especially as we try to be an agile organization, when we're trying to drive teams to be more empowered to make decisions, it's even more critical for the teams to be diverse. And the data show that when you are translating diversity to results, you see that in the outcome. So I do think that within our agile transformation, agile at scale and trying to empower teams on the ground to take action, make their own decisions and get the -- and focus on diversity, we get better results. And we have seen that with teams that have very strong principles.

Sigal, it's great to have you on the program. Thanks so much for coming in, and I know you'll be on the panel here in a few minutes.

Thank you.

Thank you.

Okay. Next up, reimagining the business and the future of work. Our signature panel here in this new post-pandemic idea. In fact, it's not a new idea. We've been working on the leading, reinventing, reimagining the customer journey now for about 3 years, add in their disruption and now throw in a pandemic, we really have a different world, a whole different environment, right, that we're in, all navigating -- looking to facilitate, enable and lead innovation. So first up, Marianne Bachynski. Marianne, welcome to the program. Good to see you.

Thanks. How are you?

It's been a while.

I know.

New role for you, CIO with AIG. Congrats.

Thanks.

When you think of the pandemic and how it's impacted your organization and your leadership style, what are your challenges and what are the big opportunities that you've been able to take advantage here?

Well, first off, I actually started AIG in the pandemic. So it was an interesting maybe experiment, if you will, but it was amazing how seamless it was, and I think a lot of people say how difficult that must be, but I have actually found it an incredible opportunity because -- for a number of reasons. There is really an instant connection, I think, when you speak to people in their homes without the formality of an office, and people are available. They're not traveling or going to a client or on vacation or whatever. And so they're much more available. And I think because no one is in the room, everybody is very, very focused on being focused. So it actually has been very seamless and hats off to IT actually around the world who have allowed us all to do this. And it's really an incredible statement. We -- I think even a few years ago, I'm not sure we would have been able to have all businesses, all schools globally working remotely. And we probably could have a lot of lessons from Sandy and certainly New York City and 9/11, but -- and planning is always key upfront. So we were fortunate enough that we had tested remote trading ahead of the crisis. I'm on the investment side, I'm not the insurance side. So it's actually been really quite interesting. But I also think from a leadership perspective, I don't think my sort of core values on leadership have changed. I think that, if anything, it's been proven that they're more than ever necessary. My mantra is really not what you can do for me, but what I can do for you and removing obstacles, et cetera. And certainly, we have a new challenge as a different way of working. But I do think that things like communication are so critical now. They're always critical. But having effective means of communication and clear objectives and being able to build a community amongst your team is really just uber important right now. Really answering the question why, what we're doing, why we're doing it, what's the impact to the business, what's the impact to our clients and how -- and that why, I think, also can be very motivating for people. It really brings to the forefront a purpose, frankly, and empowerment to act. Again, we're not together, we're not in the room together. And so really having a culture enabling people to have enough information to act and get it done. And I think working on -- in cross-functional teams is also a core competency that we need to have, what I call creating the whole brain and bringing around the virtual table, all the people you need cross-discipline to make decisions. And again those types of efforts face-to-face are -- can be a challenge. So now we have to do it remotely. We just have to be better and better at it. And I think the communications as well is really critical to address uncertainty. We've all tried to become much better at managing change. And right now, we have just so much change that -- and it is -- it can be overwhelming at times for people. So we really have to really work at distilling that uncertainty and providing clarity about what we're doing and where we're going. And Hunter, you always say, every time I come to you -- some of your great conferences, like, this is like an amazing time to be in technology, and you're right, it keeps getting better or better. But I think now it really is one of the most amazing times to be in technology because we've pulled off this incredible thing of allowing the world to work remotely. But also transformation, digitization, all these things, data collaboration, all of these things are just being accelerated by COVID. And we've all been working toward it, but it's really more than ever.

Thank you for the great, great comments, great thought leadership, and thank you for the compliment. I actually think it's probably the most exciting time, probably the most scariest time as well. Hey, Emi, Emiliano Horcada, right? Did I get that?

Yes. You can call me Emi. Emi is fine.

Thanks. That was a mouthful. That makes it a lot easier. Appreciate it. Global Head of Digital Transformation at Globant. Globant's an interesting company, right?

Yes, we certainly are. Yes. We've been -- it's not -- we've been around for like 15, 17 years. We are focusing on helping our clients to transform through a large scope from strategy design to full implementation. And I think...

And so innovating in context with this whole distance aspect, let's talk about that.

Yes. I was just to listening to Marianne, and definitely it's a wonderful time to be in technology because it has -- I think this moment has leveled the playing field for so many companies. Before maybe a few months ago, you could have a conversation of I don't know if these aspects of transformation, we can actually do it or we have a culture that does not allow that for sure. And now we have so leveled the playing field. And right now, in Globant, we are so sure that it's coming. A new wave of innovation is coming because of this level playing field that we will be able to innovate deeper, that there's a new wave of augmented -- what we're calling augmented collaboration, which is a lot of focus on how we work together and how technology help us work together not just using platforms, but really enhancing the behaviors that we have as teams and as communities. And we're so lucky to be part of the [ basical ] system right now, to be honest.

Emi, did I hear you say authentic leadership and authentic communication?

Yes, we are actually calling it augmented collaboration, which, when we think as technologies like AI and different aspects of technology can really serve a human purpose. The other thing we were exploring some of these things. And for example, we've been -- right now, everybody is at home, and it feels like that the time, the beginning or the end of the day, they debate a little bit and somebody can put a meeting for you right at the end of the day or at some point. Wouldn't it be amazing also the technology can help us to say, hey, regardless of this lot of time that's free for Emi, he's been having back-to-back meetings, why don't you just share this information in another way? Or why don't you choose a more human way to communicate with him? That aspect and a lot of different aspects to build trust between teams, which we truly believe that it's important to be productive and to be effective, it's something that we truly are working towards and using technology to really augment our capacities for sure.

Emi, brilliant comments. Stay with us here. I'll circle back to it here in a minute. Hey, Paul, welcome to the program. Paul Ferraro. He's the VP of Worldwide Go-to-Market at Pure Storage. Great partner of HMG. Thanks for your support, and thanks for being here.

Well, thank you for having me.

Hey, tell us a little bit about the usership economy and how the world has changed.

The usership economy has been evolving for many, many years. The ability, from a utility perspective to consume electricity, water, gas. And those plays were generally just volume based. But as the world continue to evolve, we find ourselves being able to retreat back into our homes when there's a pandemic or geopolitical unrest or a natural disaster or a manmade disaster. Technology and on-demand models, essentially the usership economy, has allowed us to consume all of these things non-disruptively, regardless of what the circumstances may be. So the world has changed quite considerably. And if you look at the [ automotive ] industry, they're more interested in the experience, the total experience of the traveler. And at Pure, we're interested in the total experience in that modern data experience for the data as well as for the -- for our customer.

Well, data matters, right, Paul?